“In Colorado, sales increases are probably due to weed; businesses are coming here and unemployment is low as well,” Mike Holloway, a senior mortgage advisor with Residential Lending, told Mortgage Professional America. “Some people just like the devil’s lettuce so they come here for that which also pushes rents up.”
According to Holloway, marijuana business as well as affiliate businesses that just want to take advantage of economic growth in the state have been settling in in droves.
“It’s impacted the housing market more than I thought it would,” Holloway said.
Indeed. The industry totaled over $250 million in Colorado in the first six months of 2015 alone. And it’s had an effect on housing prices.
Prices in Denver increased 17% from 2010 to 2014.
And while this may be good news for originators, whose commissions have increased as well, there are some sounding the unaffordability alarm.
A recent New Republic article argues the state is currently experiencing a housing crisis, with many residents unable to afford homes.
It’s also led to a number of local businesses and cultural centres being pushed out by companies affiliated with the marijuana industry.
“When you have an almost overnight boom industry, as you see with marijuana, it’s looking for space. And it’s an industry that is making money, so that industry can pay premium for space,” Brian Freeland, whose theater company had to find a new location once its former warehouse home was sold, told New Republic. “When you put that against another industry that is historically underfunded and historically not supported by the same kind of city government and mayor’s office, you get a very unfair balance in which the arts are competing in a market economy.”
House prices have been on the rise in Colorado and one originator is crediting the booming pot industry for that growth.